Wednesday, July 18, 2012

The lottery, scheduled to take place Wednesday at 1:30 p.m. ET in New York, is a mechanism designed to help teams perceived to need the most assistance by awarding extra Draft picks to some of them. The 10 smallest-market teams and 10 lowest-revenue teams will have the chance to win one of six extra selections in the 2013 First-Year Player Draft.

Those half-dozen picks will be made at the conclusion of the first round, following the compensation selections. Because there is obvious crossover between those two groups, there are 13 teams entered into the first-round lottery: the D-backs, Orioles, Indians, Royals, A’s, Pirates, Padres, Rays, Reds, Rockies, Marlins, Brewers and Cardinals. The odds of winning a Draft pick will be based on each team’s winning percentage in the previous season.

There will be a second group of six picks, to be made after the conclusion of the second round. The teams from the first group that did not get one of the early picks will be re-entered, along with any other Major League team that receives revenue sharing. This year, only one team—the Tigers—will be added to the second lottery. The Competitive Balance Lottery winners and the order of their picks will be unveiled on MLB Network’s “The Rundown” at 2:45 p.m. ET.

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It's interesting that with the new rules that some of the value of the extra pick will be in the extra cap space it provides. At least one of these picks is going to be spent on a 4th round talent who will sign for well under slot, so that the Padres or whoever can sign their #1 pick.

It'll be interesting to see if the Jays trade for these picks - the first picks that can be traded for. A couple years ago he traded for an impending free agent who was type B thus a sandwich pick for $500k. Wonder what it will cost now - although cash isn't allowed in the trade iirc, a team can do equivalent via quality of players going back and forth.

It's like they want to cater to super baseball nerds, but it seems even we aren't interested. I'm just glad the A's are in it, I guess, though I'm sure the Cardinals will win, whatever it is worth winning here.

The Cardinals? The defending World Series winners? The team that is averaging almost 42,000 fans per game? The team whose local radio & TV broadcasts penetrative deep into neighboring states? Really?

Really. Why the hell would you penalize a tiny market team for doing a good job? The real question is why the A's who play in a large rich market but have crappy revenues because they have no clue how to run a business.

can someone explain what the situation is with the Pirates and that kid from Standford that they couldnt sign? The story said the Pirates "might" get a pick from this draft, but I was unsure how that worked. Do they get this pick because they didnt sign him? But if they dont use the pick here they get another chance to use the pick in some sort of supplemental draft? Or they get an extra pick next year for not signing the kid? Obviously I am totally confused...

Really. Why the hell would you penalize a tiny market team for doing a good job? The real question is why the A's who play in a large rich market but have crappy revenues because they have no clue how to run a business.

I am curious as to what they have defined as their area. Having lived in Indianapolis for a while I would classify it as (35% Cardinals, 35% Cubs, 20% Reds, the rest split between multiple teams). Knowing people who have lived in Louisville, they say it is 70% Cardinals there. These are both a day trips away from St. Lois, I have done it for a Cardinals game. I know Iowa City is split three ways for Cubs/Twins/Cardinals but am not sure that is a day trip.

Just in case you weren't kidding, you do realize that Chicago is a massively bigger and richer city than Detroit, right -- even adjusted for its two team status?

No kidding? The Tigers have the 5th highest payroll. I just read the MLB.com article on how the Tigers got into the 2nd pool, and now I'm even more confused:

The other seven teams will enter the lottery for the second group of picks. By rule, teams who receive revenue sharing money and aren’t located among the top 15 markets are also added to that mix. Only one team qualifies this year under those rules — the Tigers. Detroit barely falls outside the top 15 markets, but it does, and the Tigers apparently received a little bit of revenue sharing money last year.

I don't have time right now to parse out the finer details of revenue sharing in the CBA, but it seems unfair to me that Detroit gets to enter into this pool. I'd have to problem with it if the picks weren't tradable. Giving Detroit, a high spending team, an extra trade chip in a lock-step division battle doesn't sit right with me.

Doesn't it mean exactly that? The Cardinals are a high-revenue team that doesn't appear to need any favoritism to be successful on the field and at the gate.

I guess I should have said market instead of revenue.

I am curious as to what they have defined as their area. Having lived in Indianapolis for a while I would classify it as (35% Cardinals, 35% Cubs, 20% Reds, the rest split between multiple teams). Knowing people who have lived in Louisville, they say it is 70% Cardinals there. These are both a day trips away from St. Lois, I have done it for a Cardinals game. I know Iowa City is split three ways for Cubs/Twins/Cardinals but am not sure that is a day trip.

A part of that large area is due to aggressive marketing on the Cardinals part. (through KMOX and one of the largest farm systems ever) to create a fanbase. That was stuff done in the past that is helping them now. Not really sure that being lucky/smart in the early goings should penalize you now.

Again, why should a smart team be denied benefits given to other teams in the same circumstances?

I don't have time right now to parse out the finer details of revenue sharing in the CBA, but it seems unfair to me that Detroit gets to enter into this pool. I'd have to problem with it if the picks weren't tradable. Giving Detroit, a high spending team, an extra trade chip in a lock-step division battle doesn't sit right with me.

I don't get the beef. Being a high spending team, doesn't mean they are making a lot of money, it means that their owners are willing to spend a larger percentage and not pocket as much of the profits. That is a good thing.

Years ago, revenue sharing was set up based upon how teams spend. DUMBEST IDEA EVER. The Phillies(the largest single team city) got 11mil in revenue sharing while the Cardinals (the bottom five market size in baseball) paid in 11mil, all because their owners were cheapskates/generous depending on who you were looking at.

Heck, I think the rule should be, you aren't eligible for a draft pick or revenue sharing, unless you spend a certain percentage on your payroll and development system.

Again, why does a high-revenue team that is successful on the field need or deserve special benefits? And the Cardinals are not the only team for which this could be asked.

Because the revenue is a result of smart business decisions. Not a result of circumstances. Other teams could have done what the Cardinals did, the Royals used to do it and got greedy and stopped, the Astros used to do it, and stopped. To be successful you can't ever alienate your fanbase to the point that they stop going, even if you have to lose money for a few years, you at least need to make it look like you are trying. That is why it's important to avoid 100 loss seasons at any cost. Cardinals got close after Busch died and his loria wannabe son took over, but fortunately he was forced to sell the team(he seriously consider trying to move the Cardinals to Florida)

If you are going to have a draft for the most neediest teams based upon competitive balance, the criteria for the neediest teams should be revenue and market size. Not standings, not success, but upon their circumstances that hurt them relative to other teams. (note I'm not saying this draft is a good or bad idea. Just saying if you are doing it, you do it the right and fair way, not the way to reward owners like Loria for being skinflint ########) A teams success shouldn't determine if they are eligible for a competitive balance draft.

There are real competitive issues involved among the teams, certain teams have an inherent financial advantage, the purpose of these type of things is to level the playing field.

Because the revenue is a result of smart business decisions. Not a result of circumstances.

you lost me here. For one the Cubs have been a high revenue team way beyond what they should be by this model. Two the Rays/Twins have had really good teams and have not reaped the benefits you mention. Three, circumstances are way more influential to any business than smart business decisions.

Two the Rays/Twins have had really good teams and have not reaped the benefits you mention

And they should be complaining. The Twins and Rays should have been on that list. I don't think any way you measure it, that you shouldn't include those teams. Replace the Rockies with the Twins, replace the A's with the Rays and it's probably a more accurate list. Not sure how the Orioles or Diamondbacks are on the list either.

A part of that large area is due to aggressive marketing on the Cardinals part. (through KMOX and one of the largest farm systems ever) to create a fanbase. That was stuff done in the past that is helping them now. Not really sure that being lucky/smart in the early goings should penalize you now.

Again, why should a smart team be denied benefits given to other teams in the same circumstances?

The Cardinals' revenue maximization is due to smart behavior, no doubt, but would have been impossible without the structural advantages that they enjoy.

There are many articles/examples. The most recent article that talked about this was about 6 months ago in Scientific American that was talking about Apples success using the same business model that failed them in the 80's, closed source vs open source. The Black Swan is a good book that is on this topic somewhat.
In baseball it is everywhere, NY is a bigger city than Pittsburgh and the Yankee's/Mets and Pirates have nothing to do with that, Mike Piazza was drafted in the 4,000,000th round, more than 400 players taken before Pujols, what about all the teams that gave up/passed on Josh Hamilton, or for that matter the team that drafted Josh Hamilton did they make a good business decision?
The best way to see this is to read as many predictions by the experts as possible and keep a score card, you will see that the majority of the smartest business people made all their best decisions in their past and have very little predicting power going forward. Which to me say their great decisions coincided with the right circumstances.

The Cardinals' revenue maximization is due to smart behavior, no doubt, but would have been impossible without the structural advantages that they enjoy.

I agree. But those were things done in the past, this is about the future and the current state. Heck isn't it sending a messages to the Marlins of the world that smart sound business decisions may eventually be reaped a long ways down the road?

People are arguing that the Cardinals should be treated as a big market club, but they don't get the one big market advantage, and that is a massive revenue stream. It ultimately boils down to how much potential money can be had. It shouldn't matter whether the team is able to get 80% of that revenue like the Cardinals or Yankees do, or if they get 40% of that revenue like the Mess or A's do. It should be how much is actually available to them.

Yes the Cardinals are a relatively unique franchise in the revenue scheme of things. They reside in one of the smallest markets in baseball(no matter how you cut it) and have the built in advantage of being the only team in the west for 50 plus years to develop a network fanbase, factor in good owners most of the time(with notable exceptions of course) and they generate about as much revenue as is possible for their market size. But they are still limited by their market size and of course their advantages of age are being encroached on (not that I'm complaining about the encroachment, I'm a huge fan of expansion) by new franchises(such as the Royals, Astros, Diamondbacks, Rangers and Rockies) they have been fortunate enough in the past that inept management of all of those franchise has hurt their ability to sway Cardinals faithful to the dark side, but as franchises get smarter, the Cardinals developed advantages are going to disappear.

Interestingly, Detroit's 1.84M TV homes is very close to the MLB mean of 1.89M: the 56.75M TV homes in the 26 TV markets where they play, divided by 30. What if you wanted to redistribute the teams, based on market size? Well, New York would get four teams, LA three, and Chicago and Philadelphia two each. (Philly actually gets "credit" for only 1.58 teams, but close enough.)

Of course, the Cards have an additional advantage: Location. KC is 250 miles away, and is the only team within 300 miles. Detroit, for instance, has Cleveland (170), Cinci (265), 2XChicago (285), and Pittsburgh (286). Heck, Detroit has as many teams within 300 miles as St. Louis has within 550 (KC, 2XCHI, CIN, MIL).

That said, I agree that they should be included if they're one of the 10 smallest markets regardless of their revenues/success. I just don't agree that their potential fan base ("market") = their TV market.

Cleveland is a great example of this. Even though they're a bigger TV market than STL, they have Detroit, Pittsburgh (135) and Cinci (250) on 3 sides and Lake Erie/Canada on the 4th.

St. Louis has no NBA team and little NCAA competition for corporate luxury box tickets. Denver, Detroit and the Twin Cities are all pretty saturated with pro and NCAA competition despite being just slightly larger markets.